The increased use of social media means companies have to manage their reputational risk

With the growth of social media and the use of the Internet by consumers, companies increasingly have to manage their online reputations. Companies promote their brand through the Internet, but they also have to manage the reputational risk that can result from discontented members of the public, competitors and others posting negative material about them and their products and services.

A recent survey by Deloitte underscores the importance of managing reputational risks in social media. In finding that reputational risk is now the biggest risk concern for CEOs, the survey noted that “given the speed and global reach of social media, companies today are at much greater risk of losing control over how they are perceived in the marketplace.” Even the government is using social media to monitor product hazards. For example, the Food and Drug Administration recently issued a solicitation for a company to monitor social media for emerging hazards concerning FDA regulated products, including early detection of adverse events and food borne illness.

Negative postings can appear in different forums, ranging from the company’s website to social media forums like Facebook and Twitter, and to blogs and other websites that are forums for consumer feedback, such as Yelp. Companies have to monitor these comments in real time and respond when appropriate. For the most part, companies can turn negative comments into more positive experiences for the consumer, or at least neutralize the impact of those comments. Depending on the forum in which the comments are posted, the companies may not know the identity of the person posting the negative comments. Some websites permit and encourage people to post anonymous postings, such as pissedconsumer.com and ripoffreport.com. In most cases, there are real consumers behind the postings who may have legitimate concerns that the company must address.

Non-litigation options for addressing negative anonymous postings

Companies have a range of options available for responding to anonymous postings. Many of these options involve the use of social media to respond to the comments before they rise to the level of a defamatory posting and include administrative or other remedies offered by social media outlets or other websites. There is always the option of litigation to unmask the identity of the anonymous poster, which will be discussed in part two of this three-part series of articles. Litigation should be seen as a last resort as consumers and others may view the efforts of a company to unmask and sue a consumer or other person to be a heavy-handed tactic that will chill the use of anonymous postings in the future. The remedies discussed below are, therefore, important to consider before filing suit.

Companies need to establish their own social media presence not only to extend their brand and reputation, but to counteract negative feedback form consumers and attacks by competitors. Companies also need to interact with their customers and others using the social media and to monitor those interactions proactively to insure that critical comments are addressed at an early stage. If a company is not active in social media and develops a problem that it attempts to address through social media, it will not have the needed credibility to diffuse the issue. Conversely, if the company is interacting with its customers daily, it can join the discussion, resolve issues quickly and prevent the escalation of issues into reputational harm.

Sometimes anonymous postings cannot be handled informally through a company’s social media platform, or the postings may be false and misleading and appear to be part of a larger concerted campaign to harm the company’s reputation. At that point, the company may want to consider the administrative remedies available through the website where the negative comments were posted. In some cases, the website may have procedures that can be used to remove or minimize the impact of defamatory comments.

As an initial matter, the terms of service or use of the website should be reviewed to determine whether the comments are factual statements, as opposed to opinion, that can be removed for violating the terms of the website. The company should be prepared to show why the posting is false or otherwise unlawful. For example, Yelp’s terms of service require that users agree not to write fake or defamatory reviews and to not violate a third party’s rights, including by a breach of a copyright, trademark or trade secret. If the website will not remove the posting because it does not want to get involved in adjudicating the facts, the company should consider posting a response on the website. Most websites, like pissedconsumer.com and ripoffreport.com, permit the company to post a reply to the comment that addresses or rebuts the issues raised. This can be an effective way to insert the company’s position into social media as a way to neutralize the comments.

While some websites have policies against removing negative comments, they may have other procedures that a company can use. For example, ripoffreport.com has an arbitration program in which false statements of fact can be submitted to a neutral arbitrator who will determine whether it is false. If it is found to be false, ripoffreport.com will redact it from the report.

Being prepared for anonymous negative comments on social media and knowing how to address them on key social media platforms can go a long way to minimizing reputational harm without resorting to litigation. The next installment in this series will discuss how to deal with anonymous posters when litigation is necessary.